Networks Must Adapt To Decline In TV Viewers

Advertising executives gathered in New York City last week to get their first look at the fall primetime television lineup. The four big networks announced decisions to cancel some shows, including stalwarts like "CSI: Miami" and "Desperate Housewives." And they also welcomed newcomers, including lots and lots of new comedies. But this is all happening against the backdrop of a dwindling audience. It used to be that the network's losses were cable televisions gain, but cable ratings are also down.

If you're watching less TV now, how come? What's changed? Give us a call: 800-989-8255. Email us: talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION. New York Times national media reporter Bill Carter joins us from our bureau in New York. And nice to have to back on TALK OF THE NATION.

BILL CARTER: Nice to be with you.

CONAN: And depending on the network, those primetime number drops range from a little scary to, well, just about appalling.

CARTER: Yes, that's about right. I think the interesting thing is that a lot of people feel there's more good television on right now than there's been in years, perhaps ever. But the actual, you know, amount of television viewing is going down because they're not watching on television. They're watching in different ways. They're watching on - either online on streaming or, very often now, they're watching on delay. When ratings come in later, they tend to be much better.

CONAN: So those numbers do pick up later. But doesn't that change their relationship with advertisers?

CARTER: Clearly, because there are very few people who are going to watch the entire commercial load when they can replay a show and skip through it. Some commercials do get seen. I think it's sort of a myth that people think they never see any that way. But it's clear that skipping commercials is a threat to the, you know, economic model of television. And as we go forward, it's going to get more and more, you know, easily done. And I think people are going to watch less and less of the commercials. And therefore, the basis of financing these shows is going to get really problematic.

CONAN: There was an interesting - in the piece, you wrote about this for the Times, you quote the example of an executive who got interested into the third year of a show when his son went back and found them all online or at Netflix or various other places, and ended up watching them and then watched the season finale live and hated it.

CARTER: He hated it. He - and this is a person who had programmed the network a year earlier. So he had been in the business of finding shows that would, you know, sell to advertisers. The show was "Walking Dead." And he watched it with his son, you know, on this - on Netflix. And then when he watched the finale live, he couldn't stand the breaks and the commercials, and he swore he will never do it again. Well, they've already - they've lost one of their own there.

CONAN: And this is interesting, because as the networks are presenting their fall lineups, well, this is a presentation to advertisers. You might want to buy time on the new "Nashville" show or the comedy line up on ABC TV.

CARTER: Yes, exactly. And really, what the advertisers have to weigh is the less impact the commercials are having - they're clearly not having as much impact as they used to have - versus how else are we going to reach this amount of people. And they're still convinced that they have to buy enough network time to get that mass audience in. I mean, there are still, you know, 60 percent, maybe, of the audience that doesn't have DVRs and probably sees more commercials than average.

So that's still worth buying them, but there's going to be a line that's going to be crossed. I think the fall numbers will be watched extremely carefully to see how many viewers have come back and how many have just completely adopted this habit of never watching the show live.

CONAN: And the alarming numbers are in the most significant group, 18 to, what...

CARTER: Forty-nine, yes.

CONAN: Eighteen to 49, a group I left sometime ago.

CARTER: That's right. And clearly, in the younger end of that, it's the most acute. So the newer viewers, the viewers that they're going to want to keep for a long time, are very much in the habit of not watching commercials at all, or watching online, or watching all of the season at once. They don't want to sit and just watch one episode at a time - all these viewing habits which have been, you know, honed by the ability to create your own schedule, not to pay attention to someone else's. You create your own. I'm going to watch this show five episodes at a time on a Wednesday night starting at midnight. That's the way you want to do it, you can do it that way now.

CONAN: And it's begun to have an impact. As you said in one of your pieces, there are shows that are negatively affected by the fact that there are so many reruns. People hate reruns.

CARTER: Yes. And particularly now, you see people gotten used to the cable model, which is "Mad Men," let's say. It comes on. It's on 13 weeks in a row. It doesn't get interrupted. There's no repeats in the middle, and you know it's going to be on every Sunday for 13 weeks in a row. Well, the networks, for years, have had a policy of running 22 to 24 episodes maximum of a show. But their season is, you know, 36, 39 weeks long so there's stretches in there that that are repeats or you don't see the show for a long time.

ABC had this show, "Revenge" this year, a serialized drama. You can't repeat it. It was off for like six weeks in a row. Viewers tend to get lost, and they forget about it. It's not as interesting to keep up with it. And I really think one of the things that's most interesting for me, and I talked about it in an article I wrote recently, is that creators of televisions shows have now got something I call cable envy. They want that system. They want that schedule. They don't want to be stretched out for 22, 24 episodes a year. It's a lot harder to write that way, and it's more satisfying to see them play week after week after week with interruptions.

CONAN: And the new Kevin Bacon show is, in fact, going to be scheduled exactly that way.

CARTER: Exactly. And that's a really good example because Kevin Bacon, a big star, basically put that in the contract. He would only do 15 episodes maximum. And it's a continuing story, so they're going to start it in the middle of the season in January and run it straight through. The way - that's Fox network. And they did that with "24," and that really worked with "24," which was 24 episodes, but they didn't interrupt them. And it's build momentum. And the audience stays with it. And that's, I think, the only way now to do a serialized show.

CONAN: We're talking with Bill Carter, the national media reporter for The New York Times about the upfront and the dwindling television audience in primetime. If you're watching less TV these days, how come? Give us a call: 800-989-8255. Email: talk@npr.org. We'll start with Jenny. Jenny with us from Denver.

JENNY: Yeah. The reason that I'm not watching as much TV or almost no TV is because I kind of got out of the habit when everything turned into some kind of a competition show or a reality show, and I didn't like those until then. It's like I'll watch "The Simpsons" because I know when they're on. Beyond that, I mean, I just don't watch very much.

CONAN: And, boy, there were long strong stretches, Bill Carter, when if it wasn't "The Voice," it was "American Idol," or "Dancing with the Stars," or "The Great Race."

CARTER: "X Factor," yes, all those shows. But, you know, what's interesting is they're extremely popular. Those shows are very popular because they tend not to be watched on a delayed basis. People watch them live. So they're actually more valuable than they've ever been because advertisers know whoever is watching that probably is watching them live. I think one thing we have to sort to distinguish, people are not really watching less television content. They're - they love - the shows are followed very avidly now, but they're not watching it on television as much. That's really the distinction, I think.

CONAN: Jenny, do you watch on - do you tape shows and watch them under your DVR?

JENNY: No, I don't.

CONAN: No. OK. Well...

JENNY: No, I'm pretty low tech. I'm just out of the habit. I just don't do it.

CARTER: Well, that's an interesting thing because, as I pointed out, there's about 43 percent penetration of DVRs. There's a whole lot of people who don't use those anymore, and they do have to be addressed by the old system of when's my show on? I got to watch it at, you know, Sunday night at 8 for "The Simpsons."

CONAN: Well, thanks very much for the call, Jenny.

JENNY: Mm-hmm.

CONAN: What's interesting, there were kinds of shows that the networks really believe brought people in to watch live. For example, football or these contest shows where you're going to watch the result show live.

CARTER: Yes. They - there's a theory that in the fall - these numbers were not so bad in the fall because football is so prevalent in the fall and so huge in America now. And that, clearly, is watched live. And so, the habit of I'm turning on Sunday Night Football. I know it's on Sunday night. I watch that live. And on Monday, there's a football game. And on Thursday, there's a football game. And that gets you into more of I'm turning on the TV and sitting down to watch.

Whereas, in this spring this year, "American Idol," which had been enormous every year until this past year, it lost so much of that habit and dropped about 30 percent of it's audience, that there was no live event driving the live viewing of television. That's one theory about why the numbers this spring - particularly there was a four-week period I wrote about - virtually every day, there were four or five shows that hit their lowest overnight number in history. They'd never been that low. And everybody in the business was saying what happened? Is this, you know, did we fall off the table all of a sudden? They were looking for theories for that.

CONAN: Well, here's a theory. This is from Dory in San Antonio: I couldn't afford cable anymore. It was over a $150 a month. I since purchased a Roku and stream on Netflix. I can watch multiple seasons at once. It's much more enjoyable, wastes less time, I can pace it myself, no commercials, less than $10 a month for Netflix, plus my Internet fee, which is about 50 bucks a month, which I would've had pay for anyway.

CARTER: That's what a lot of young people are doing. Cable fees are extremely high. If you're not a sports fan, all right, and you don't want to see live news, you don't really need to watch cable television, do you? I mean, you really can avoid it pretty easily. The problem with Netflix-only is you're not really getting the full range of shows. They don't have every show in their library. There's a lot of material that you won't get that way.

But if you search the Internet really aggressively, you can find them. They're either on Hulu or they're being replayed on various other sites. And it's pretty easy to catch up on shows, and you can watch, as that woman said, a whole bunch of them at once, which gets you really involved in a show. And I know myself, having done that in the old days, you get, you know, the season all on a CD, I mean, on DVD. You would be able to watch the entire season of, let's say "House." That's how I originally got into that show because I hadn't seen the first couple of seasons but I immediately caught up. And I think it really is an advantage to watch television that way. It gets you hooked.

CONAN: By coincidence, I think the last episode of "House" is on tonight.

CARTER: That's correct, yes.

(SOUNDBITE OF LAUGHTER)

CONAN: Let's see if we'd go to Phil. Phil with us from Grand Blanc in Michigan.

PHIL: Yeah. I watch more TV, but I watch less commercials because I use the DVR. And as with the other caller, I use the Roku and Hulu and Netflix, and so it makes it more convenient. It's just - you don't have to sit there, wait for your show to come on.

CONAN: How do you know which new shows to follow?

PHIL: I don't. I let my wife decide.

(SOUNDBITE OF LAUGHTER)

CONAN: OK.

CARTER: Well, it's interesting. What I'm curious about is - and clearly, this is the wave of the future, is can we sustain this? If everybody moves to that model and doesn't watch anything with commercials in it, how are these shows that are very expensive to produce and high-quality now, how are they going to continue to be produced? I mean, some of these shows are three, $4 million an episode. They're made at a deficit, and the only way that they can get financing is to sell them overseas and then sell the reruns and syndication. But while the networks show them on the air, their only source of revenue is the advertising. If that goes away, I think we're going to see a big, big change in either how we distribute these or how we pay for them.

PHIL: Well, it's strange that you mentioned the overseas part of it because I just got hooked on a Netflix one from Norway and - so I've been watching an episode a night from that.

CARTER: You mean, it's got subtitles, I imagine.

PHIL: It's, well, you know which one I'm talking about?

CARTER: Is it the murder mystery one?

PHIL: The "Lilyhammer."

CARTER: Yeah, "Lilyhammer." Yeah, that's actually produced by them. That's a - an original for them, and you see more of that - today, for example, Hulu announced that they were going to have 11 of their own productions on this summer. I think that's great, but we have to see how good the quality is. That's the big question.

CONAN: Phil, thanks very much.

PHIL: You're welcome. Have a good day.

CONAN: You, too. We're talking with Bill Carter of The New York Times. You're listening to TALK OF THE NATION from NPR News. And we've gotten several tweets on TV habits. WR3N says: I haven't turned my TV on since the "Downton Abbey" season two finale. Why? Netflix on my iPad. And Cheppy H(ph) agrees: We haven't watched much TV in about three years. When we got Netflix, we watched HBO and other shows like we like a year later. So what's the tipping point? When is the point of no return?

CARTER: That's a really good question that everyone in the business is fretting over. I think, as I said, I think the fall is going to be watched extremely closely. The tipping point could've been this auto-hop idea that DirecTV - I mean, Dish TV was promulgating last week, that it's a device that let's you automatically skip the commercials. You don't have to press a button anymore. And the networks will sue over that. They'll do anything to prevent that from happening because, as I said, I think people who think they skip all the commercials don't actually and they actually see some of them and, you know, because you have to physically skip them.

CONAN: Right.

CARTER: But when we get to the point where, you know, somebody invents a device like that, it's not going to be kept out of the hands of the public who really wants it. When we get to that point, I think, we're going to have to see sort of a la carte TV, where you basically pay for the things you want to see. I hope that isn't as expensive or more expensive as cable. That would be the downside of that. Right now, cable is really expensive. My bill is like $225 a month.

CONAN: Well, yeah, but you get to write it off.

CARTER: Well, it is covered by The Times. But still, somebody's paying that. That's a crazy amount of money to pay to watch television.

CONAN: And yet you could get all of those shows through another device.

CARTER: You could get - well, I don't know you can get all of them. You're not going to get live ESPN sports. You're not going to get the NFL. You're not going to get CNN when there's news breaking. There's a lot of things you would not get if you are watching through Roku or a Netflix or on your iPad. However, I think you will eventually find a way to get all of that. I think where the audience goes, the content will go. If the audience is receiving it a different way, the content will go that way.

CONAN: Let's see if we can go to Chelsea. Chelsea with us from Cape Cod.

CHELSEA (CALLER): Hi. How are you doing?

CONAN: Good, thanks.

(CALLER): I just wanted to comment that I am a 30-year-old mom, and my husband and I decided this year that we are going to cut out television cable from our family's life. And so what we've done is we don't let our children really watch television. They get to maybe watch a couple of shows a week through Netflix, but we really get to cater like what they watch. And for ourselves, we only watch about probably one night, on average, a week of Netflix shows, like, you know, we kind of gotten into a couple of things and we'll wait for them.

CONAN: Mm-hmm.

(CALLER): And then we just rent movies if we want to watch something. We just found that the commercials where just such a waste of time and most of the television that we found was - seemed to be a waste of time. So we decided to try to do more things around our house at night and, you know, get into making projects and stuff.

CONAN: I think I hear small children in the background.

(CALLER): Yes.

CONAN: This may get more difficult as they get a little older.

(CALLER): You know, it is, and, you know, most of the families we know, their kids watch TV every day, but we have decided not to. And we spend a whole lot more time just doing, you know, imaginative things, and I think they're better off for it.

CONAN: All right, Chelsea. Thanks very much and...

(CALLER): Thanks for your time. We love your show.

CONAN: Thank you.

(CALLER): And we're watching, you know, we're listening to NPR a lot, too.

CONAN: Well, there is a good decision.

CARTER: That's a good alternative.

CONAN: There you go. Bill Carter, we hope you listen to public radio in addition to all that cable television you watch.

CARTER: I do, every day driving home.

CONAN: Thanks very for your time.

CARTER: OK.

CONAN: Appreciate it. Bill Carter, the national media reporter for The New York Times with us from our bureau in New York. Tomorrow, a new poll shows broad support for compensating certain types of organ donors, well, for certain kinds of compensation. Join us for that conversation. I'm Neal Conan. It's the TALK OF THE NATION from NPR News. Transcript provided by NPR, Copyright NPR.